How to Read a Stake Pool
Choosing the right stake pool affects your rewards. Pool explorer sites like pool.pm and adapools.org display metrics that can look overwhelming at first. This guide explains exactly what each number means and what to look for when picking a pool.
Live Stake and Saturation
Live Stake is the total ADA currently delegated to the pool, including your own if you are already delegated. Saturation is the live stake expressed as a percentage of the optimal pool size. Cardano's k-parameter (currently 500) defines the ideal number of pools; a pool is fully saturated at approximately 68 million ADA (total supply ÷ k).
A saturated pool (100% or above) earns reduced rewards for all its delegators. The protocol penalizes over-saturation to encourage delegation diversity. Always choose a pool below 90% saturation for full reward potential. The sweet spot is typically 30-90% — established enough to produce blocks consistently, but not so large that saturation becomes a risk.
Fixed Cost
Every stake pool charges a fixed cost deducted from the epoch's total reward before anything is distributed to delegators. The minimum fixed cost is 340 ADA per epoch, enforced by the protocol. Some pools charge higher fixed costs (500, 1000 ADA) — this may be justified if the operator provides additional services.
The fixed cost matters more for smaller pools. If a pool's total epoch reward is 500 ADA and the fixed cost is 340 ADA, only 160 ADA remains to distribute to delegators. For a large pool earning 5,000 ADA per epoch, the fixed cost is a much smaller proportion.
Variable Fee (Margin)
After the fixed cost is deducted, the pool operator takes a percentage of the remaining rewards — this is the margin or variable fee. A 1% margin means the operator keeps 1% and delegators share the remaining 99%. A 0% margin means delegators receive the maximum possible.
Zero-margin pools can be attractive but are sometimes run as marketing tools by new operators who raise the margin once they build a delegation base. A 1-3% margin is sustainable and reasonable. Be cautious of high-margin pools (5%+) unless the operator provides a compelling value proposition.
Pledge
Pledge is the amount of ADA the pool operator personally delegates to their own pool. Higher pledge shows commitment and very slightly increases rewards (via Cardano's incentive formula that rewards pledge). A pledge of 50,000 ADA or more is a reasonable bar for a serious operator.
More importantly, pledge represents skin in the game. An operator with 1 million ADA pledged is economically incentivized to keep their pool running well — abandoning it would forfeit their own staking rewards.
ROA and Luck
ROA (Return on ADA) is the historical annualized return for delegators, typically displayed as a percentage. Compare pools to the network average (roughly 3-5% in 2026), but recognize that short-term ROA fluctuates based on luck — small pools sometimes go many epochs without producing a block (below expected ROA) and then catch up. Look at 30-day or 90-day ROA for a more stable picture.
Luck is displayed as a percentage on some pool explorers: 100% means the pool produced exactly as many blocks as expected given its stake; 120% means it produced 20% more than expected (due to random slot leader selection). High luck does not persist — it averages toward 100% over time.
Key Takeaways
- Choose pools below 90% saturation — over-saturated pools pay reduced rewards.
- Fixed cost (minimum 340 ADA/epoch) is deducted before delegators receive anything; it matters more for smaller pools.
- Variable fee (margin) of 1-3% is sustainable; 0% is attractive but watch for post-growth margin increases.
- Pledge indicates operator commitment; prefer pools with at least 50,000 ADA pledged.
- ROA fluctuates with short-term luck; use 30-90 day figures rather than single-epoch results for evaluation.